Ois

FEATURED ARTICLES ABOUT OIS - PAGE 3

bombay: government bonds fell on monday afternoon, dragged down by an official's comments that the central bank is not in a hurry to cut interest rates. traders said the remarks by the unidentified reserve bank of india (rbi) official weakened sentiment in a market already worried about year-end liquidity and profit-booking. and this was despite rbi governor bimal jalan having made the same comment about rates last week. traders expect the central bank to lower banks' cash reserve ratio or cut the bank rate, but most of them are also certain these announcements would be made only around the end of april, when the monetary policy is released.

Bond prices slipped further on Thursday, with concerns over the possible impact of Wednesday's fuel price hike on the inflation number. Yields across the board rose, with the 10-year benchmark bond, the 8.24% paper maturing in 2018, ended the day at 8.19%, above the Wednesday's close of 8.14%, reports Our Bureau in Mumbai. According to market participants, traded volumes were thin, with almost nobody willing to take long-term-positions. "There is a heavily bearish sentiment, and we may see yields touching the 8.25%-mark soon," said a dealer with a private bank.

MUMBAI: Overnight interest rate swaps (OIS) have risen to two-year high, as the benchmark 5-year OIS touched 7.72%, the highest since October 2008, on fears of another round of rate hike by RBI as inflation refuses to budge. The one-year swap was at 7.09%, again its highest since October 2008. An overnight interest rate swap is an agreement between two parties to exchange stated interest rate obligations for a certain period in respect of a notional principal amount, which is the size of the swap.

MUMBAI: The Reserve Bank of India (RBI), known for its fierce anti-inflationary stance, may be intervening in the government bond market to stem falling yields, as the markets feel, but investors have silently factored in a future rate cut in the overnight index swaps (OIS) market — a proxy platform for G-secs. The benchmark 10-year bond rose to a 13-month peak on Tuesday hitting 8.37% intraday. OIS is a derivative instrument that allows a fixed rate of interest to be swapped with a floating rate when two parties have opposite views on rates.

Bond yields dipped on Tuesday, even as trading volumes were low and liquidity remained tight. Yields on the 10-year benchmark bond ended the day at 8.57%, easing from Monday's close of 8.64%. Market sentiment has eased off since RBI governor's comments on Monday, which signalled a gradual tightening in the monetary policy, reports reports Our Bureau in Mumbai. "Though volumes on the market were low, there was some amount of buying interest," said a dealer with a private bank.

MUMBAI: India's benchmark 10-year bond yields rose to a one-month high on Tuesday after the central bank cut the proportion of government debt that lenders must hold, while casting doubt about future rate cuts after raising its inflation outlook. As widely expected, the Reserve Bank of India kept the country's main lending rate at 8.00 percent, while continuing to express its concerns about inflationary pressures. The hawkish stance is expected to raise the stakes for the government to take measures to boost growth with actions such as attracting foreign investment and reducing its fiscal deficit.

MUMBAI: Interest rate futures have clocked trading volumes of Rs 276 crore in their very first day of trade. Trade in the newly-launched derivatives is expected to pick up with regulators and government officials stating that the exchange-traded instruments are superior to over-the-counter overnight index swaps. Trading in interest rate futures began on the National Stock Exchange (NSE) on Monday. The contracts are based on 10-year government bonds, bearing a notional coupon of 7% per annum, compounded every six months.

In an interview with ET Now, Ashish Ghiya , MD, Derivium Capital & Securities Pvt Ltd, talks about the bond markets. Excerpts: Given the fact that the RBI did raise the interest rates by 25 basis points and they did signal that further rate hikes will depend on what inflation prints at, do you think the bond markets are factoring in another rate hike in the October policy or that there will be a pause in the interest...

Bond yields fell to their lowest in two weeks on Thursday and traders said they expect the yield curve to flatten after the government raised the limit on foreign investment in debt. A marginal cut in the October-March borrowing also lifted sentiment. The 10-year benchmark bond yield ended down 4 basis points at 7.90%, its lowest since September 9 after trading in 7.90-7.96% range intraday. Volumes were heavy at Rs 12,445 crore ($2.7 billion). The government increased the cap on foreign investment in government and corporate bonds by $5 billion each to $10 billion and $20 billion, respectively.